IRAN has arrested eight local British embassy staff, triggering London's fury overnight and further exacerbating tensions with the West over the post-election turmoil in the Islamic republic.

The latest backlash against what Iranian leaders have branded as foreign ``meddling'' came as opposition leaders continued to defy the regime, rejecting a panel set up to hold a partial recount in the hotly-disputed presidential vote.

More than 2000 people are still in detention and hundreds more are missing across Iran since a government crackdown on protests, the Paris-based International Federation for Human Rights (FIDH) said.